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Decrease in crop size leads to cotton consumption outpace production in 2021-22: ICAC


Decrease in crop size leads to cotton consumption outpace production in 2021 22 ICAC

This latest edition of Cotton This Month shows, a decrease in the size of cotton crop in top cotton producing countries like India, Argentina and South Africa that has resulted in consumption outpacing production in the 2021-22 season.

Consumption to exceed production by 265,000 tons

Yield of smaller-than-expected crops will lead to consumption exceeding production by about 265,000 tons. Production during the year is projected to reach 26.13 million tons while consumption is projected to reach 26.09 million tons. Total area under cotton cultivation will decrease 1 per cent during the year to 32.78 million hectare

To assess the impact of rising consumption, the secretariat uses stocks-to-use ratio that measures available cotton stocks as a share of cotton mill use to quantify the relationship between cotton supply and demand. Cotton price rise when the stock-to-use ratio declines due to tighter supply. In contrast, the ratio rises when supply exceeds demand, pulling cotton prices downwards. The total area under cotton cultivation also impacts prices.

Cotton forecasts to resume in August

The Secretariat plans to suspend publication of price projections and resume in August after re-evaluating the price situation. The current volatile market makes it difficult to predict accurate figures. Earlier too, it had suspended price forecasting in 2010-11 season of unprecedented high price and volatility.

Cotton This Month is published by the International Cotton Advisory Committee at the beginning of a month with Cotton Update published mid-month. The mid-month ‘Cotton Update’ contains updated information on supply/demand estimates and prices.

Transparent information on cotton production

An association of cotton producing, consuming and trading countries, the International Cotton Advisory Committee (ICAC) was formed in 1939. ICAC helps member strengthen global economy by providing transparent technical information on cotton production. The Association also acts as a forum for discussing issues covering the cotton supply chain from farm to textile manufacturing. It will provide a free access to its cutting-edge technologies like the voice-based app and virtual technology cotton training program. The intergovernmental commodity body covering cotton, ICAC is recognized by the United Nations.


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